More small and medium-sized companies are tapping the equity market aggressively for fresh capital in a bid to ride the recent stock rally.
Over the past two days, seven Hong Kong-listed firms with a market capitalisation of less than HK$1 billion have raised a total of HK$1.7 billion though share placements.
They include property developer China Velocity Group, clothing supplier Hembly International Holdings and media company China Chief Cable TV. The latest to join the queue is polishing wheel maker PME, which aims to raise HK$570 million through a top-up share placement.
'It is the fastest way for a small-cap to get new cash,' said a banker at an investment bank, adding that institutional investors were still keen on investing for a quick return.
'To complete the share sale in a short time, they usually skip some common practices such as the pre-deal roadshow. They prefer to sell shares to some parties directly.'
Market observers say the absence of large companies or even red chips joining the fund-raising bandwagon is due mainly to the low interest rate environment.